GlossaryEN1 min readUpdated: Jun 13, 2026

Incoterms Drop Shipment

Drop shipment allows the seller to ship goods directly from manufacturer or warehouse to the buyer's end customer—the buyer never physically handles the merchandise.

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Last updated: 13 June 2026Published: 27 January 2026

Source: https://iccwbo.org/resources-for-business/incoterms/

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Definition & Explanation

Drop shipment allows the seller to ship goods directly from manufacturer or warehouse to the buyer's end customer—the buyer never physically handles the merchandise. Under Incoterms, the seller bears risk and costs until the defined delivery point (e.g. DAP at the customer's location), while the buyer manages the order and customer relationship. This model is common in e-commerce and B2B distribution, significantly reducing inventory costs. Critically, even though goods bypass the buyer's premises, the Incoterm rule must clearly specify where risk and cost transfer—ambiguity can trigger customs disputes or liability conflicts.

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Incoterms Drop Shipment

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